CO129-585-10 Assembly of aeroplanes in Hong Kong 8-1-1940 - 31-7-1940 — Page 18

A

> Think this must be it

Tel. 392 Secret

C.N.A.C. now state that

39. M.K.

Jove.

"one

18

8.7.401 bannere

Lave

acquired from

fort. 2 Vallées a / bonder which they propose to odd b regular service from M. X, is Mark

Martinique

#

The group for Martinique in this telegram is only one figure out from that for "Chungking "and the latter is clearly meant. I have amended the telegram accordingly.

There is also some obscurity in the statement that C.I.A.C. have acquired two Vultees and one Condor from the Chinese Govt, those planes are, as I think they must be, the remainder of the shipment with which earlier correspondence on this file is concerned, since we were told in (17) that three of the four aeroplanes were already the property of the Corporation. What I think is meant, in fact, is that the Corporation have now given up any intention of deserinin forwarding

the planes to the Chinese Government and propose to take them into their own fleet.

The original shipment from the United States consisted of three Vultee commercial transport aircraft and one Condor of the same type. These were shipped to Hong Kong by the Inter-Continent Corporation which hot ho requested permission for their assembly there for perminin delivery to the Chinese Govt. It was decided herein view of a decision of the Cabinet on the 17th Nove:íbér, 1937, that we could not entertain a suggestion by the Chinese Govt. met "that the Government of Hong Kong should allow the assembly within the territory of the Colony of aircraft shipped there in part and that such aircraft when assembled should be flown from Hong Kong to Chinese territory". It was understood that after the refusal to allow the delivery of these planes to the Chinese Govt. from Hong Kong the possibility was being explored of forwarding them over the Burma highway to China. It looks, in view of this telegram, as though it were not possible to follow up that suggestion. In the meantime too one Vultee has been flown with our permission to Rangoon by the C.N.A.C. leaving one Condor and two Vultees, which must, I think, be the aircraft referred to in (39), at Hong Kong. These it is now proposed should be taken into the regular service of the C.N.A.C. between Hong Kong and Chungking. It will be seen that the Acting Governor says that additions to the service are very urgently required in the interests of the Hong Kong Govt.

The question now arises whether the ruling of the Cabinet quoted above is applicable to the present proposal. My own view is that it is not. There seems to be a fundamental difference between forwarding aeroplanes for use in China, possibly for military, e.g. troop carrying, purposes and employing them on a regular service between Hong Kong and China, where they would be subject to the usual restrictions against the despatch of arms or war materials from Hong Kong to Chungking. The situation, however, is of course very ticklish in the Far East at the moment and the Foreign Office may feel that the Japanese would not consider the proposal if put into effect in any reasonable light and wish to oppose it on the grounds of general policy. It is for them though to take that line and I think we should ourselves support the Acting Governor's suggestion.

by

"? To F.D. (wpy to A.M.) accostagly

WB347 inson.